Former Tesco finance chief cleared by accountancy watchdog

The Financial Reporting Council (FRC), Britain's accountancy watchdog, has dropped an investigation into the former Tesco's chief financial officer after almost two years. In December 2014, the watchdog launched a probe into the supermarket's accounts, after accountants from Deloitte found the company had artificially inflated its first-half profits estimates.

The accountancy firm found similar malpractices had occurred during previous quarterly reports, leading to a £263m ($344.4m) black hole in the FTSE 100 giant's accounts.

Laurie McIlwee, who had left the job at Tesco eight months before the scandal fully erupted, was investigated alongside PwC, the company's auditor at the time, for his role in the process that led to the profit overstatement.

However, on Wednesday (31 August), the FRC revealed it had shelved the probe focusing on McIlwee, as there was "no realistic prospect that a tribunal would make an adverse finding in relation to [his] conduct".

The latest development are expected to see McIlwee, who has not worked full-time since leaving the retailer, not face any action over his alleged role in the scandal and he could move to a new company.

McIlwee, who was paid £400,000 in the six months after he quit Tesco, left the retailer over a disagreement with former chief executive Philip Clarke. However, while he was asked to remain available to assist the retailer after he left, it later emerged he did not provide any services to the company and was in fact asked not to come into the office.